FIX standards to automate IPO orders

IPOs are set to become automated following the release of FIX Trading Community’s best practice guidelines setting out message standards for new listings.

IPOs are set to become automated following the release of FIX Trading Community’s best practice guidelines setting out message standards for new listings.

Last year, buy-side firms met to figure out a way to make placing IPO orders, as well as new issues of bonds, more efficient and transparent through automation.

FIX’s best practice document sets out recommendations to create a straight through process to transmit orders for new issues using FIX protocol via an order management system and receive allocations. It attempts to replicate the order place process in the secondary market and remove risks of errors in transmission and misinterpretation of allocations.

Tony Russell, head of dealing at Newton Investment Management and a member of the FIX global buy-side committee, said: “These new guidelines are based on the familiar FIX protocol, which will mean it’s straightforward for market participants and technology vendors to be able to quickly deploy new solutions to enable automation of their IPO order process.”

FIX said the new guidelines will give asset managers a fully audited, time-stamped order generation process. It will also ensure all orders have gone through pre-trade compliance checks before being sent to the deal manager.

Last year, The TRADE awarded FIX Trading Community its buy-side project of the year award for its work on automating new issues.

The full best practice document can be downloaded from the FIX Trading Community website HERE.

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